Clean energy investment expected to triple by 2030: analysis

LONDON: Investment in clean energy capacity is expected to triple between now and 2030, according to analysts from Bloomberg New Energy Finance (BNEF).

The new BNEF research, revealed to delegates at the company’s sixth annual Summit in New York yesterday, shows that growth in renewables investment could jump 230% to US$630 billion a year by 2030.

The surge in investment would be due to increasing cost-competitiveness of wind and solar technology compared to traditional fossil fuel alternatives, coupled with the expansion of more reliable, non-intermittent clean energy such as hydro, the analysis states.

BNEF’s findings are drawn from its Global Energy and Emissions Model, which integrates economic prosperity, demand growth, technology cost evolution, expected climate policies and fossil fuel market trends, to form three future scenarios, the most likely of which is called the ‘New Normal’.

The ‘New Normal’ outlook forecasts the following:

Investment requirement for new clean energy assets in the year 2030 would be US$630 billion (in nominal terms), which is over three times the investment in clean energy capacity that was built in 2012.

70% of all new power generation capacity added between 2012 and 2030 will be from clean technologies.

Wind and solar will claim the largest shares of new power capacity added (in gigawatts) by 2030, accounting for 30% and 24% respectively.

In terms of power produced, the share of renewables will increase from 22% in 2012 to 37% in 2030.

Guy Turner, head of economics and commodities for Bloomberg New Energy Finance, commented: “This is the first time we have produced such detailed analysis of the future world energy system under different scenarios. It highlights that, in spite of the recent news showing a downturn in clean energy investment since 2011, renewable technologies will form the anchor of new generating capacity additions, even under a less optimistic view of the world economy and policy choices.”

Michael Liebreich, chief executive of Bloomberg New Energy Finance said: “The news right now is dominated by stories of pain caused by overcapacity on the supply side of clean energy, and the lure of cheap shale gas. But this is playing out against the falling costs of renewable energy and of all the technologies required to integrate it into our energy system, and falling costs win. What it suggests is that we are beyond the tipping point towards a cleaner energy future.”

Mark Kenber, CEO, The Climate Group, said: “BNEF’s analysis shows that, in the power sector at least, the Clean Revolution is now not only possible but underway. However, like any process of transformational change, for its full benefits to be reaped, it will need to be nurtured by supportive policy, corporate leadership and continued investment in low carbon technology innovation.”